HDFC Bank delivered a 20 per cent growth in net profit in the December quarter, on the back of 17 per cent growth in loans and 23 per cent growth in net interest income.
While loan growth has slowed from 21.8 per cent recorded in the September quarter, the bank has put up a good show given that the overall bank credit has slipped to 10.5 per cent as of December quarter.
The bank has been outpacing the industry growth by 6-10 percentage points in the past.
The loan growth compares well with its peers such as ICICI bank and Axis Bank that declared their results earlier. While ICICI bank delivered a 12.8 per cent growth, Axis Bank grew at a faster pace by 23 per cent, thanks to its lower base.
Retail loans On the retail front, HDFC Bank has grown a tad lower than its peers. Its retail loans grew by 12 per cent in the December quarter, when ICICI Bank and Axis Bank delivered a 24-26 per cent growth.
The slowdown in the commercial vehicle and construction equipment segment has impacted HDFC Bank’s retail loan growth.
However, despite this, the bank has been able to deliver higher net interest income growth vis-à-vis its peers.
Axis Bank and ICICI Bank delivered a 20 per cent and 13 per cent growth in net interest income.
HDFC Bank, though, has seen its pace of deposit growth slip to 18.6 per cent in the December quarterfrom 24.8 per cent in the previous quarter.
As a result of this, the bank’s low deposit current account savings account (CASA) ratio has fallen by 2.3 percentage points to 40.9 per cent.
However, HDFC Bank continues to deliver industry leading net interest margins at 4.4 per cent.
HDFC Bank is a cut above its peers when it comes to asset quality as well. Its gross non-performing asset (GNPA) at 0.99 per cent of loans is lower than that of its peers.
Axis Bank’s GNPA stood at 1.34 per cent of loans while ICICI Bank’s stood at 3 per cent in the December quarter.
HDFC Bank’s restructured book is just 0.1 per cent loans while that of ICICI Bank is a much higher 3.2 per cent.
HDFC Bank has also successfully raised ₹9,766 crore through Qualified Institutions Placement and public offering of American Depositary Shares. This will aid growth when the economy turns around.